Dieter Van Besien took to his pen following the ruling of the General Court of the Court of Justice of the EU. The General Court ruled that the Belgian excess profit regulations amount to illegal state aid. As a result, the minister can decide today not to give 700 million euros to multinationals, but to invest in our well-being. Ecolo-Groen is increasing the pressure for this in the federal parliament.
My view on illegal excess profit settlements
The excess profit rulings were agreements between multinationals and the tax authorities whereby they mutually agreed on what part of the multinationals’ profits was actually taxable in Belgium. The agreement was that profits made as a result of the international operations of the multinational would not be taxed by Belgium. Access to the scheme depended on the extent to which multinationals centralized activities in Belgium, created jobs or made investments. You could see this as a win-win, but you would have to be quite short-sighted and cynical to see that. After all, only the very best took advantage, and that cost Belgium quite a bit. We are talking about 36 multinationals, including AB InBev for an amount of 163 million euros, BASF for 110.8 million euros and Proximus for 95.8 million euros.
The excess profit regulations amount to illegal state aid. That was the opinion of the European Commission and now also of it the General Court of the Court of Justice of the EU. The excess profit rules themselves were created in 2005, and the European Commission ruled in 2016 that this was illegal state aid. The then government, Michel I, therefore abolished the scheme. In exchange, the companies received the famously underfunded tax shift. This meant a reduction in corporate taxes for companies, but for Belgians few jobs, jobs, jobs in exchange for a significant hole in the budget.
In response to the European Commission’s judgment, Belgium filed an appeal. Belgium has now lost that appeal before the General Court. But what exactly does ‘losing’ mean in this context? Perhaps we have done a good thing, since since 2016 we have not paid out the excess profit settlements to the multinationals, but left them in a blocked account. In the meantime, there is 700 million euros in that account, 700 million in unpaid illegal state aid. Those 700 million euros are ours, at least if we don’t appeal.
The Minister of Finance, whose fight against tax fraud is a top priority (especially now that the tax reform has not been implemented), is investigating whether an appeal against the decision is desirable. This is about an investigation by a working group and certainly not about his conscience. After all, the conditions of the excess profit ruling were constructed in such a way that only the largest multinationals were eligible for it. The fact that 36 gigantic companies could therefore claim it, while countless SMEs in similar circumstances could not, was the main reason for the General Court to condemn the scheme.
We call on the minister to follow his conscience and the coalition agreement. The reader will understand that Belgium can make good use of the state aid that has not yet been paid out. After all, we are facing enormous challenges, both in terms of closing inherited wells and investing in outdated infrastructure and the energy transition. The fact that we are suffering image damage at some multinationals seems to me personally to be a side issue. We and they will survive that.
Minister, drop that appeal. The excess profit regulations should never have happened. The fact that, in your words, ‘a new wind is now blowing’ in European politics is good and beautiful. We can possibly blame past mistakes on headwinds, but why would we hesitate to take steps in the right direction if the weather is good?
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